ARCHIVED Services Pay Directive: 1978-223 (52)

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November 30, 1978

Hull, K1A 0S5

SUBJECT : Recovery of Salary Overpayments

The purpose of this directive is to provide procedures for the recovery of salary overpayments and to supplement Services Pay Directive 75-186 (47), dated December 10, 1975, which deals with overpayments that must be recovered from the first available funds due to the employee.

Treasury Board Circular 1971-107, dated July 19, 1971 (Services Pay Directive 71-109) provides deputy heads and heads of agencies with the authority, under certain conditions, to extend the recovery of salary overpayments over a number of pay periods. It is noted that this direction is not being followed in all cases. Salary overpayments are a debt due to the Crown and recovery is not, therefore, contingent upon the approval of the employee.

The department, not the paying office, is responsible for ensuring that all overpayments of salary, wages, pay or pay and allowances are recovered from any sum of money that may be due or payable to an employee or former employee who has been overpaid.

The following procedure should be observed in respect to of those overpayments for which an extended recovery period is provided by Treasury Board Circular 1971-107.

Active Employees

When an overpayment of salary is discovered by the paying office for an employee who is on strength, the department or agency will be advised of the amount overpaid. No further action will be taken by the paying office until the responsible department or agency notifies the paying office in writing of the rate and/or the period of recovery.

When a department or agency discover an overpayment which can be recovered over a specified period, the reporting document sent to the paying office should indicate the rate of recovery and/or the period of recovery. If no direction is given to the paying office, then the recovery of the overpayment will be made in full from the first available funds due to the employee.

Terminated Employees

When an overpayment of salary remains after all available funds have been applied and the individual has terminated his employment in the public service, the paying office will advise the department or agency of the outstanding amount of the salary overpayment. No further action will be taken by the paying office once they have notified the department of the outstanding overpayment. If the terminated employee is entitled to an immediate annuity, an immediate annual allowance or a deferred pension type benefit under the terms of the Public Services Superannuation Act, the department will notify the Superannuation Division of the amount overpaid and the rate of recovery. When the individual's public service pension becomes payable, the Superannuation Division will initiate recovery of the overpayment, either at the rate specified by the department or agency or by installments equal to 10% of the individual's monthly basic pension, whichever rate is the lesser. If the overpayment is liquidated prior to the commencement of the pension, the department or agency must notify the Superannuation division immediately.

When an overpayment has been partially or fully recovered from a pension benefit, it is the responsibility of the department or agency to inform the paying office. This action will enable paying offices to maintain correct and up-to-date records.

The above procedures do not preclude normal liaison between departmental personnel and paying offices regarding overpayments but are intended to formalize procedures to ensure recoveries are made. Departments and Agencies should try to minimize overpayments by prompt dispatch of pay action documents and by the return to paying offices of obviously incorrect cheques.

If the contents of this directive differ from the provisions of a collective agreement, the agreement governs.

Original Signed by
J. D. L. Campbell

B. Crossfield
Director General
Compensation Services Branch